The auto industry wreaked havoc when the UK and European Union Following the Brexit trade deal, but not before the car manufacturers announced the closure of the factory and the plans to build several new vehicles in the country.
There could also be more losses with last week’s deal. Including automaker Nissan Motor Company may struggle to qualify certain UK-assembled models for tariff-free exports to the European Union as they evaluate whether they are sufficient sources for their components locally. The costs associated with switching suppliers and the burden of customs declarations, certifications and audits can still leave car companies and assure that they are better off investing elsewhere.
“It’s still a slim deal with major implications and costs for the motor vehicle,” said David Bailey is a business economics professor at Birmingham Business School in England. “A lot of flexibility will depend on the degree of allowability and phasing.”
The stakes are huge for the UK economy. Country’s auto industry Employs more than 860,000 people, of which a fifth are workers in automobile and parts factories. The region sent 42.4 billion pounds ($ 57 billion) worth of cars and components overseas last year, accounting for 13% of the country’s total exports. The Brexit deal eliminates the risk of widespread exodus, but can still cost less for car makers with much lower costs.
The companies are in the wake of the deal with Nissan and its Japanese peers. The outlook was already tarnished by the Brexit agreement.
Company recently Decided against making an electric model at its North England factory and about two years ago It was planned to build another sport utility vehicle at the same location. Is honda motor company To close its only UK car plant next year.
Nissan and Toyota Motor Corp’s hybrid and electric models cut some slack in a Brexit trade deal manufactured in England, with the agreement allowing a greater proportion of vehicle content to come from outside the UK or EU. Nevertheless, the original so-called rules of origin required 10 per cent more local material than what the UK had demanded.
|Law of origin|
It is unclear whether Nissan’s all-electric Leaf hatchback manufactured in Sunderland has enough local material to avoid the levy. While Nissan welcomes the trade agreement, it will now “assess the detailed implications for our operations and products,” said Azusa Momose, a company spokesperson in Yokohama by email.
Company spokesman Sonomi Akawa in Tokyo said that Toyota’s Corolla Hybrid compact cars make Burnstone as well as non-electrified vehicles, which are eligible for the EU’s tariff-free exports. The company benefited from its engine plant in Wales, she said.
The car manufacturer’s tariff requirements going forward may be affected by their plans to bring their battery supply chain to the area. Electric vehicles will be given another six years to bring foreign materials of less than 45%, threshold gasoline and diesel cars will be held immediately.
“The government has underscored the urgent need to create conditions that would attract large-scale battery manufacturing in the UK,” said Mike Haves, car manufacturer and businessman, Society of Motor Manufacturers and CEO of the UK car industry And transform our supply chains. “Business Groups.” Improving the UK’s competitiveness will be necessary to help reduce the additional costs and burdens that our new relationship has brought about. “
Other carmakers are pending the outcome of investment talks at UK plants.
BMW AG delays next generation work Mini platform due to uncertainties on Britain’s trade relations with the European Union. Chief Financial Officer Nicholas Peter said This month BMW will consider making mini cars in Germany or China if tariffs weaken the business case of producing them in the UK
PSA Group CEO Carlos Tavares said In March the manufacturer of Vauxhall cars will determine if there was a business case for its factory in Ellsmere Port, and the company may ask the British government to compensate for any trade barriers that may arise.
BMW and PSA welcomed the trade deal, while warning that they would need to closely examine the agreement to assess the implications of their operations.
“The deal is expected to now give a green light to major investments that have been stalled in the UK amid the uncertainty of Brexit,” said Professor Bailey of Birmingham Business School. “There will be additional costs to the industry in terms of non-tariff barriers, but things can go awry.”
– Assisted by Stephen Nicola, Christoph Rauld, William Wilkus, Shiho Takezawa and Tsuyoshi Ojima